ACCEL International Corp. reports 1995 fourth quarter and year-end results; board of directors set annual meeting date.

DUBLIN, Ohio--(BUSINESS WIRE)--March 29, 1996--ACCEL International Corp. (NASDAQ/NMS:ACLE) today reported fourth quarter and full-year operating results for 1995.

While continuing operations maintained their profitability, strengthening of claim reserves on discontinued property and casualty lines of business, legal costs incurred on matters related to the Realtors' Errors and Omissions program litigation and severance benefits from the restructuring of the company resulted in a loss for the quarter and the year as a whole. Market value appreciation of portfolio securities, however, resulted in a net increase in the company's net worth of approximately $5 million in 1995.

Fourth Quarter 1995

For the fourth quarter, ACCEL recorded an after tax loss of $2,292,000 ($.52 per share) compared to a net loss of $587,000 ($.13 per share) for the fourth quarter of 1994. Positive results in the core auto aftermarket products were offset by reserve strengthening in discontinued property and casualty lines of $1,800,000, legal costs related to the Realtors' Errors and Omissions program litigation of $200,000 and severance expenses of $350,000. ACCEL's gross premium written in the fourth quarter of 1995 was $11.8 million compared to $15.7 million for the comparable period in 1994.

Realized pre-tax gains on the sale of investments for the fourth quarter 1995 were $152,000 compared with $49,000 for the same period of 1994.

Full Year 1995

ACCEL's 1995 net loss after taxes of $1.5 million ($.33 per share) compared to a net loss of $5.2 million ($1.18 per share) for 1994. Profitability in continuing core product lines was more than offset by approximately $2.4 million of losses and reserve increases in discontinued property and casualty lines of business, $550,000 in legal costs associated with the Realtors' E&O program and the $350,000 in severance expenses. Gross written premiums for 1995 were $55.4 million compared to $60.5 million in 1994.

Realized pre-tax gains on the sale of investments were $455,000 for the full year 1995 versus $808,000 in 1994.

Continuing Lines of Business

Acceleration Life Insurance Co. continues to write group credit life and health insurance and Acceleration National Insurance Co. issues policies in connection with the company's extended service contract program. At year end 1995, Acceleration National introduced two new programs, one for trucking and charter buses and the other for auto dealers. The trucking and charter bus program has produced almost $5 million of new annualized premium during the first quarter of 1996 and the auto dealer program will begin production during the second quarter of 1996. All previously written property and casualty products have either been terminated, reinsured or are in run-off.

Commentary

Thomas H. Friedberg, chairman, president and CEO of ACCEL, said, "While 1995 appears on the surface to be a repeat of the past two years, with our credit insurance and extended service contract products continuing to be profitable but those profits being more than offset by losses from our discontinued lines of business and other non-recurring items, there are some significant differences that support my belief that these things from the past are finally behind us.

"With regard to the discontinued lines of business, we brought in two claims consultants with many years experience in claim litigation to review all the remaining Realtors' E&O claim files. Their efforts resulted in the negotiated settlement of many claims and the establishment of what management believes to be adequate reserves on the remaining files. We then established some additional reserves to guard against unexpected outcomes in the settlement of the remaining claims. A similar review of the discontinued Farmowners program is being conducted during the first quarter of 1996, but we expect the impact of this review not to be material to the company's financial condition," he added.

"We were successful in our Realtors' E&O litigation being awarded a judgment in excess of $5 million. We are agressively pursuing collection of this judgment but, to-date, have not recognized any part of the award in our financial statements. The legal costs for concluding this matter should be less than what we had to spend to pursue the litigation," he continued.

"Further, we have reached the end of our major restructuring of the infrastructure of the company. This was a painful undertaking over the last several years as the personnel count in the company decreased from a high of 254 to the present total of 80 employees. Thus we will no longer see the level of severance expenses that have been incurred in the past.

"Finally," he concluded, "we are beginning to see the results of our new activities. The challenges of the past have often appeared to be insurmountable and never-ending, however, the fact is that we continue to deal with them as we must, while, at the same time, we are now making visible progress in developing our new business opportunities and relationships, clear evidence of our resilience and our ability to persevere.

"We fulfilled the commitment we made to restructure our finances, sell the home office building (which closed on March 21, 1996) and dissolved the UK subsidiary in order to address our cash flow needs. With a successful collection effort on the judgment, the growth of our new programs and the continued profitability of our core products, we can look forward to a brighter future."

Board of Directors

The board of directors of ACCEL, in a regular meeting held March 11 & 12, fixed Tuesday, June 11, 1996, at 10 a.m. as the date and time for the annual meeting of stockholders to be held at the Stouffer Renaissance Hotel in Dublin. The record date for the meeting was fixed as April 12, 1996, and all current directors were nominated for re-election.

ACCEL International Corp. is a Dublin based holding company that provides specialty insurance products and services through its insurance subsidiaries operating throughout the United States. -0-

            ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS

                                        Year Ended Dec. 31,
                                    1995       1994       1993
                                      (Thousands of dollars,
                                      except per share data)

REVENUE:
 Gross premiums written          $  55,443   $  60,504   $  95,766
 Less reinsurance ceded             12,147      12,495      30,261
                                 ---------   ---------   ---------
   Net premiums written             43,296      48,009      65,505
 Increase in unearned premium
  reserves                          (2,443)       (409)     (3,856)
                                 ---------   ---------   ---------
 Premiums earned                    40,853      47,600      61,649
 Net investment income
  Interest and dividends             6,488       6,678       8,397
  Realized gains                       455         808       1,336
 Service fees on extended
  service contracts                  2,137       2,063       1,819
 Other income                          542         370       1,609
                                 ---------   ---------   ---------
                                    50,475      57,519      74,810

BENEFITS AND EXPENSES:
 Policy benefits                    20,118      24,997      38,431
 Commissions and selling expenses   21,526      19,612      29,929
 Reinsurance expense recovery         (626)       (927)     (4,276)
 General and administrative          7,817       9,336      14,327
 Taxes, licenses and fees            1,743       1,903       2,430
 Interest                            1,748       1,589       1,653
 Decrease (increase) in deferred
  policy acquisition costs            (750)      2,085      (2,058)
 Write off of subsidiary                 -       3,829           -
                                 ---------   ---------   ---------
                                    51,576      62,424      80,436
                                 ---------   ---------   ---------

  LOSS BEFORE FEDERAL INCOME
   TAXES                            (1,101)     (4,905)     (5,626)

Federal income taxes
 Current (benefit)                     273         219        (703)
 Deferred                               86         114         358
                                 ---------   ---------   ---------
                                       359         333        (345)
                                 ---------   ---------   ---------
  NET LOSS                       $  (1,460)  $  (5,238)  $  (5,281)
                                 ---------   ---------   ---------
                                 ---------   ---------   ---------
Net loss per common share        $    (.33)  $   (1.18)  $   (1.19)
                                 ---------   ---------   ---------
                                 ---------   ---------   ---------
Weighted average number
 of common shares
 outstanding                     4,446,432   4,446,432   4,446,432
                                 ---------   ---------   ---------
                                 ---------   ---------   ---------

CONTACT: ACCEL International Corp., Dublin

Nicholas Z. Alexander, 614/764-7180